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LETS BEGIN WITH A THOUGHT
Mother
Market
teaches us
every day and
we try remain
humble
student.
An investment in knowledge pays the best interest.
The four most
dangerous words in
investing are This
time it's different.
Sir John Templeton
An investment in

Do not forget that 2016-17 is
going to be a turning point in
your life and I wish you all the
best for your new challenges in
your new corporate life!
WELCOME TO THE
COURSE ON
Fixed Income
Securities and
Structured Finance
Products
We shall be using a
gen

NOTHING IS A WASTE OF
TIME
IF YOU LEARNED
SOMETHING FROM IT.
Here is an
opportunity to MINT
money!
Bitcoins
What is Bitcoin?
Bitcoin is a global Peer-to-Peer
currency that is designed for the
Internet.
It is modeled after gold and behaves
like cash onli

A thought for
the investor
If you are following
the advice of Warren
Buffet, then you are
following an
investment strategy
which is called
Contrarian
Investing
Contrarian
Investing
Itis
an
investment
strategy in which an
investor purchases and
sells in

Do you believe that
Do you believe in the
philosophy
Let the
market be
made free
and
everything
will be taken
care of itself.
Lets see what Milton
Friedman to say about Free
Markets
Are you aware of the
consequences of free
markets?
Story
A free market

What keeps financial markets
alive?
The mantra for financial markets
"The combination of
optimism and
overconfidence is one of the
main forces that keep
markets alive."
An important lesson for us
A lesson
Positive thinking can be useful, but
extreme opti

Risk is wonderful
start loving it!
Lets have a quick look at what we
were discussing in the previous
class
We started with
interest rate risk
INTEREST RATE RISK?
Interest Rate Risk is understood in terms of
sensitivity of bond price and thereby of retur

Lets start the
session with one
of the most
power personality
of the WORLD!
Guess who she is
She is
Janet Yellen, Chair of the
Board of Governors of the Federal
Reserve System.
She made an important
announcement on Friday, August
26, 2016
Though
the
FED

It is always
advisable to
start with
good advice!
In the previous class, we started with
RISK
BOND RISK
Every bond should be
evaluated not only in
terms of RETURN but
also in term of RISK.
RISK.
Please recall that
the source of risk is UNCERTAINTY!
unc

Bonds are
interesting;
so
is the World
of Bonds!
Look at the following news item.
On December 9, 2003, the FOMC released the following
statement:
The Committee perceives that the
upside and downside risks to the attainment of
sustainable growth for the ne

Financial
Markets are
WONDERFUL
places where so
called THE BIG
can become
SHORTS!
Lets see a clip from this
movie and learn what
message it wants to give
to us as a student of
finance
Lets try to
understand how to
model Share Prices
using
CONTINUOUS
STO

Lets start the day by talking about
GREAT PERSONALITY in bond
investing!
Quote from William H. Gross
Finding the best person
or the best organization
to invest your money is
one of the most
important financial
decisions you'll ever
make."
Any question bef

Lets start the day
With A Thought
There are no
permanent changes
because change
itself is permanent.
It behooves the
industrialist to
research and the
Before, we proceed
We have an interesting
issue to discuss!
Before, we proceed
lets have a look around

Lets start
with some
good
thought
Stocks are bought on
expectations, not on
facts.
-Gerald M. Loeb
Average investors who try
to do a lot of trading will
only make their brokers
rich.
-Michael Jenson, Finance Professor
Harvard.
First, lets see what we

Lets start with
What clicks to your
mind when you read
such a news item?
Before, we proceed further
A question for us
Lets talk about Capital Budgeting
Decisions
How do we evaluate profitability of a
project?
How do we evaluate risk of a project?
What

Somethin
g
interestin
g to
begin
with
"Every
once
First
a quotation
inTHINK
a ABOUT
while,
IT
the market
does
something
so stupid it
takes your
breath
An example of
such a stupidity!
The stupidity came in the form of
Rigging of LIBOR!
But, such kind of i

Some good words
Some words are always welcomed!
Never invest
emergency
savings in the
stock market.
Suze Orman
Time to look back
Lets have a quick
look at what we did
in
the
previous
class
MANAGING BOND RISK & RETURN.
DESIGNING
BOND
PORTFOLIO
STRATEGIES.

Enjoy something about
bonds
Do you believe that bonds are
simple instruments?
You must be expecting me to keep
the things simple about bonds!
It is a challenge for me!
Lets see what for we struggling
to learn in the previous class
What have we learnt from

Lets start with a
thought
Mother
Market teaches
us every day
and we try
remain humble
student.
An investment in knowledge pays the best interest.
After understanding the
basics of stochastic
processes
We tried to learn
stochastic CALCULUS!
Tool of Stocha

A thought for
the investor
Everyone
knows that you
should buy low
and sell high.
and yet, all too
often, we buy
high and sell
low.
Can you imagine why people
give such an advice?
What is it mean when
one says that the market
is UP?
In equity market, it
m

Examples of Green Financial
Products!
Now, something which people may not
believe
You take a loan from a bank and
INSTEAD OF PAYING INTEREST TO THE
BANK YOU ARE GETTING INTEREST FROM
THE BANK!
This family
got the
mortgage
from a bank
and the bank
is pay

Is There a Bond Market Bubble?
An article by
Ron Rimkus, CFA
25 August 2016
What is a financial bubble?
A financial bubble occurs when the market
price of a security or a group of securities
increaseswell beyond the point where the
long-term benefits of

Lets start with a quotation
Everyone
knows
that
chasing hot stocks or mutual
funds is a sure way to get
burned-yet
millions
of
investors flock back to the
flame every year. Many do so
even though they swore, just
a year or two before, never
to get burned